Delia's Settles iTurf Shareholder Class-Action Lawsuit
The settlement calls for Delia to provide more than $3 million in newly issued stock to former iTurf shareholders. The company will issue 1 million shares in the first quarter, the price of which will be adjusted if necessary to provide a minimum value of $3.25 million to shareholders.
CEO Stephen Kahn said in a statement that he's glad the shareholder lawsuit is behind him.
"We continue to believe the suit is without merit, but feel resolving it allows us to eliminate the risks, expense and disruption of continuing litigation and will enable our team to focus exclusively on running the Delia's business," he said.
A week after it merged with iTurf in August 2000, Delia's shut down the company, putting 25 people out of work. As a result of the closure, Delia's took a one-time charge against earnings of $100,000.
Kahn said at the time that "prohibitive investment costs" prompted the decision to close iTurf.
"In conducting a comprehensive review of our online businesses, we decided that the disproportionately high cost of running iTurf.com prohibited ongoing investment," he said.